RBI Bonds 2023 vs Tax Saving Fixed Deposits vs Sovereign Gold Bonds

RBI Bonds vs FD vs SGB

RBI Bonds vs FD vs SGB – Which is Better for Investment in 2023?


Tax Saving Bank Fixed Deposits (FD) are the traditional investment vehicle for most Indian households.
According to a recent RBI report, approximately 50% of household financial assets in India are in FDs.
Let’s come to the point. If you are planning to invest this year, and are looking for no-risk avenues, then RBI Bonds and fixed deposits are good options to consider.
In addition, you can also consider Sovereign Gold Bond. However, some people might argue that a gold bond is a low-risk investment since its gold price can drop or rise due to external parameters.
So, which one should you opt for? How do you choose between the three – RBI Bonds vs FD vs SGB?
Here are some points that can help you make the decision.

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Let us start with the common features of these three schemes:

Common Features

Who can invest?1– A person resident in India,

A – in her or his individual capacity, or
B – in individual capacity on a joint basis, or
C – in individual capacity on anyone or survivor basis, or
D – on behalf of a minor as father/mother/legal guardian

2– A Hindu Undivided Family
Where to buy?Through banks (Online/Offline).
Nomination FacilityAvailable
Joint holdingYes
PaymentPayment can be made through cash or cheques or demand draft or electronic fund transfer.

Also Read RBI Bonds 2023 or Floating Rate Savings Bonds | Rate of Interest | 

RBI Bonds vs FD vs SGB


Also Read Sovereign Gold Bond : Best Returns on Gold Investment

ParameterRBI BondsTax Saving FDSGB
Issued byRBIBankRBI
Maturity period7 years5 years8 Years.
Interest rate7.35%4.50% – 6.75%The return from SGBs are in terms of interest and capital appreciation. Investors get a fixed interest rate of 2.5% per annum.
Furthermore, it is over and above the gold price return.
Minimum InvestmentINR 1000/-INR 1000/-1gm/finally Year
Minimum  InvestmentNo maximum limit1.5LMaximum of 4kgs wherein for trusts and similar entities max ceiling is 20kgs.
Tax benefit on investmentNo tax benefit on investmentInvestments up to Rs. 1.5 lakh deductible from taxable income under Section 80C.No tax benefit on investment
Tax treatment of interestInterest is added to income and taxed according to your slabInterest is added to income and taxed according to the income slab TDS is not applicable
Calculation of interestHalf-yearly compounded basisCumulative, on maturitySGB offers a 2.50% fixed interest rate per annum.
Interest paymentsCumulative or non-cumulative (payable half-yearly)Cumulative, on maturitynon-cumulative (payable half-yearly)
Loan facilityNot eligible for collateralCan be used as collateralYes
Risk Factor No-RiskNo-RiskLow Risk
Premature withdrawal Premature redemption shall be allowed for specified categories of senior citizens only.NoPremature withdrawal is applicable only after the 5th year onward on the coupon payment date and is also tradeable if held in Demat form.
Senior Citizen Benefit They may take a premature exit after 4, 5, and 6 years based on age group.Most of the banks provide FD rates to senior citizens at an extra rate of 0.25% – 1.00% (approx.).NA

Also Read Senior Citizen Savings Scheme | Interest rate | Benefits | SBI | Post Office